# DAO & Governance

The Milk & Mocha DAO (Decentralized Autonomous Organization) is the community’s decision-making engine, powered entirely by $HUGS holders through the **HugVotes** system. This framework ensures that the direction of the ecosystem — from game features to NFT drops and community initiatives — is guided by the people who actively participate in and support it.

Every $HUGS token represents voting power, and the more tokens a holder stakes in the governance contract, the greater their influence in proposals. This stake-based model encourages long-term commitment to the ecosystem, as only actively staked tokens count toward voting power.

Proposals may range from creative decisions — such as the theme for the next NFT collection, new seasonal events in the metaverse, or exclusive merchandise designs — to more strategic ones like adjusting staking rewards, introducing new utility features, or allocating funds for marketing campaigns. The DAO can also determine which charities the project supports, tying governance back to the brand’s core values of kindness and community care.

Voting is conducted through a transparent on-chain system. Once a proposal is submitted, the community has a set period to review, discuss, and cast votes. After the voting period ends, smart contracts automatically execute the approved decision without reliance on centralized authority. This not only reinforces decentralization but also builds trust through verifiable, tamper-proof records.

DAO participation is designed to be rewarding. Holders who actively vote may receive bonus $HUGS from a dedicated governance reward pool, fostering consistent engagement. In addition, certain high-value governance contributors could be recognized with exclusive NFTs or access to private governance discussions for more in-depth strategic planning.

Through HugVotes, the Milk & Mocha ecosystem ensures that $HUGS holders are more than passive participants — they are active co-creators of the project’s future. The DAO aligns community incentives with ecosystem growth, empowering fans to shape the narrative, utility, and roadmap of their favorite bear duo.
